In the efficiency wage model, an increase in productivity will cause
A. an increase in the real wage.
B. no change in the real wage.
C. a decrease in the real wage.
D. an increase in both the real wage and the level of employment.
Answer: B
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A game in which each player has a dominant strategy of defecting, and each ends up worse off than if they had both cooperated is called
A) a pure coordination game. B) a prisoner's dilemma game. C) an assurance game. D) a battle of the sexes game.
A rent ceiling set below the equilibrium rent decreases the quantity of housing supplied because
A) landlords of previously barely profitable apartments refuse to rent them. B) the supply of housing increases. C) fewer tenants will search for housing. D) demand for housing will increase. E) the supply curve of housing immediately shifts leftward.